The CEOs of Micron and Cadence, as well as high-ranking officers from Applied Materials and AMD, took part in a significant semiconductor event in India in the presence of Prime Minister Narendra Modi. This occasion, with some of the most renowned chip corporations, puts into evidence India's aspirations to become a major semiconductor centre, akin to the United States, Taiwan and South Korea. To entice foreign organizations to invest, AMD has declared its plan to put in about $400 million in India over the next five years.
At a Friday event attended by Prime Minister Narendra Modi, top American semiconductor chiefs lavished India's technology industry with commendations. Representatives from Micron, Cadence, Applied Materials, and AMD joined Ajit Manocha, CEO of U.S. organization SEMI, in acknowledging India's ability to become a significant global chip making center. Manocha stated that India's political, domestic, and corporate elements have all culminated to create a unique opportunity. He believes that looking back at 2023, it will be seen as a landmark year in the establishment of semiconductor production in the country. The gathering of major chipmaking firms emphasizes India's motivation to establish itself as a major semiconductor hub alongside the U.S., Taiwan, and South Korea.
India has crafted a two-pronged chip strategy that includes both enticing foreign companies to establish operations and make investments in the country, as well as forming alliances with other key semiconductor countries like the United States. To this end, New Delhi has implemented several supportive policies for the semiconductor sector; one such measure was the $10 billion incentive package authorized in December that is open to both domestic and international firms. During a tour of the U.S. last month, Prime Minister Modi indicated that India was committed to working with the United States on semiconductors and other related matters. At Semicon India, representatives of various American chip firms mentioned their investments in India and revealed new ones, attesting to India's ambition of luring in foreign firms. AMD, for instance, announced that it has allocated an estimated $400 million over the next five years for the construction of its largest design center, located in Bangalore.
Mark Papermaster, the CTO of AMD, highlighted during his keynote speech on Friday that India teams will play an essential role in the progress of AI machine learning and developing both hardware and software capacities. Last month, Micron revealed their intention to inaugurate a semiconductor assembly and testing plant in Gujarat. This investment will total $825 million. Sanjay Mehrotra, CEO of Micron, stated on Friday that they are positive this investment will be stimulating for other investments in the sector, will upgrade the indigenous manufacturing capability, motivate innovation and back the creation of more jobs. India's IT minister Ashwini Vaishnaw added Friday that construction of the plant would start shortly.
Young Liu, the chairman of Foxconn, which assembles Apple's iPhones, was a notable attendee at the event. Foxconn has been making a push into semiconductors in recent years, and last year, they had agreed to a $19.5 billion joint venture with Vedanta, an Indian metals-to-oil conglomerate, to set up a semiconductor and display production plant in India. This month, however, Foxconn pulled out, adversely affecting both the company and India's plans. Nevertheless, Liu's presence at the event still suggests Foxconn's enthusiasm to invest in India, as he told CNBC-TV18 Friday that they plan to invest $2 billion in India in the next five years. Anil Agarwal, the chair of Vedanta Group, also announced that they have identified "world class partners for technology" in semiconductors and are in the process of tying up with them.
Despite the high-profile event with all the CEOs, India still faces a few roadblocks in the semiconductor industry. According to Pranay Kotasthane of the Takshashila Institution, the country could be attractive to investors when it comes to packaging and testing - an operation that takes relatively low-skilled labor but high capital investment. However, no major Taiwanese company in the market has yet established a presence there. Kotasthane attributes this to "the lack of policy consistency and high import tariffs".In the realm of chip manufacturing (known as "foundries"), the issue lies in securing good technology partners. This reportedly included the failed tie-up between Vedanta and Foxconn, whose technology partner was European firm STMicroelectronics. No proposals so far have been able to find the necessary technology partners, according to Kotasthane.Still, analysts remain positive, citing India's expansive domestic market and incentives that draw investors. On Friday, Prime Minister Modi expressed his confidence in India's capabilities, stating, "Skilled engineers and designers are our strength. Anyone who wants to be a part of the world's most vibrant and unified market has faith in India."
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